Safaricom has officially launched a its zero-interest credit service called “Faraja,” allowing its customers to make purchases of up to KSh100,000 with no interest fees. The service is expected to disrupt the mobile loans market dominated by products like Fuliza, an overdraft service on M-Pesa.
Empowering Customers and Businesses
Faraja is set to revolutionize how customers shop by offering credit for purchases made through Safaricom’s Lipa Na M-Pesa platform. With the option to buy goods and services ranging from KSh20 to KSh100,000, customers can complete the payment within 30 days without incurring any additional costs. Peter Ndegwa, the CEO of Safaricom, emphasized the service’s potential to boost sales for businesses, enabling customers to buy products even when they lack immediate funds.
“Many businesses lose out on sales when a customer would like to make a purchase but lacks money at that point. We are glad to partner with EDOMx to offer Faraja empowering any business to grow their sales by enabling their customers to buy now and pay later,” said Peter Ndegwa, the CEO of Safaricom.
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The partnership between Safaricom and EDOMx Ltd, a Kenyan financial technology firm, aims to enhance loyalty and customer-focused programs, creating a win-win situation for both businesses and consumers.
How to Access Faraja Loan
The Faraja loan is available to all qualifying Safaricom users with active Safaricom lines. The individual’s credit rating determines the loan limit, which is accessible only through Lipa Na M-Pesa options, such as Buy Goods (Till Number) and Paybill Number.
To access the Faraja loan, follow these steps:
- Dial *799# to join Faraja.
- Opt-in by selecting the appropriate option.
- Enter your Safaricom M-Pesa PIN to obtain your Faraja Limit.
- To make a payment to a merchant, dial *799# and choose Lipa na M-Pesa – Buy Goods and Services or Paybill option.
- Enter the desired payment amount and your M-Pesa PIN to complete the transaction.
Safaricom will notify you via SMS about the status of your transaction, whether successful or unsuccessful.
How to Repay Faraja Loan
Repaying the Faraja loan is a straightforward process:
- Dial *799# from your Safaricom line.
- Choose the transaction you wish to pay and press send.
- Enter your M-Pesa PIN and press send.
- Accept or decline the transaction.
- Once accepted, you’ll receive an SMS notification confirming the credit transaction details, the amount paid, and the new balance.
Supporting Businesses and Expanding Reach
Safaricom’s collaboration with EDOMx will enable the Faraja service to reach over 606,000 businesses on Lipa Na M-Pesa, subject to a negotiated facility fee payable by the businesses. EDOMx will extend credit to these businesses, allowing them to receive immediate payments when customers use Faraja for purchases.
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The Central Bank of Kenya’s approval of EDOMx as a digital credit provider under regulations published last year underscores the commitment to regulate fintech and protect consumers from predatory lending and privacy violations.
Conclusion
With the introduction of Faraja, Safaricom is revolutionizing the shopping experience for its customers and supporting local businesses. The zero-interest credit service offers a convenient and flexible way to make purchases without incurring additional costs.
As businesses embrace this new offering, customers can look forward to a seamless and affordable shopping experience through Safaricom’s Lipa Na M-Pesa platform. The collaboration between Safaricom and EDOMx highlights the commitment to innovative financial solutions that benefit both consumers and businesses in Kenya’s dynamic digital economy.
